STC Series 7 Chapter 13 Test Exam
2025 With 100% Correct Answers
A customer owns shares of restricted stock and now intends to sell them. If the proper forms
are filed with the SEC, the customer may sell these shares:
A. At any time
B. Over a 35-day period
C. Over a 90-day period
D. Over a 180-day period - CORRECT ANSWER✔✔C. Over a 90-day period
Under Rule 144, an investor who intends to sell either restricted or control stock must notify the
SEC by filing Form 144 at the time the sell order is placed. Once the filing is made, the customer
may sell these shares within 90 days.
A broker-dealer that is an MSRB member firm sells bonds to one of its customers. If the broker-
dealer is a member of the syndicate, the firm is entitled to the:
A. Takedown less the concession
B. Additional takedown plus the management fee
C. Total takedown less the management fee
D. TC. Total takedown less the management fee
D. Total takedown - CORRECT ANSWER✔✔D. Total takedown
A member of the syndicate is entitled to the additional takedown plus the concession, which is
also known as the total takedown. Only the syndicate manager is entitled to the management
fee. A broker-dealer that is not a member of the syndicate selling part of a new issue of
municipal bonds is entitled to the concession.
Mr. Brown is a 15% owner of SamCo, a company whose stock is listed on the New York Stock
Exchange. His wife owns 4% of SamCo. If Mrs. Brown wishes to sell some of her SamCo shares,
she:
,A. Must do so according to Rule 144
B. May only do so with the permission of her husband
C. May do so provided that her husband also sells shares
D. May sell the shares without restriction - CORRECT ANSWER✔✔A. Must do so according to
Rule 144
Rule 144 specifies procedures for the sale of restricted stock and control stock. Restricted stock
is stock that is not registered and is acquired through a private placement. Control stock is stock
acquired by affiliated persons. This includes officers, directors, owners of more than 10% of the
stock of a corporation, and their immediate families. Since Mr. Brown owns 15% of SamCo, Mrs.
Brown is selling her shares as an affiliated person.
A primary offering of securities is being made for a company listed on the NYSE. Prospectuses
must be delivered:
A. Only on purchases made at the public offering price
B. For 25 days after the deal has closed
C. For 40 days after the deal has closed
D. For 90 days after the deal has closed - CORRECT ANSWER✔✔A. Only on purchases made at
the public offering price
A primary offering of securities for a company that is already exchange-listed requires that
prospectuses be delivered only on purchases, at the public offering price (POP). There is no
aftermarket delivery requirement.
Which TWO of the following conditions apply and would permit the sale of securities outside
the U.S., without registration with the SEC?
I. Any offer or sale is permitted to be made only to qualified institutional buyers
II. Any offer or sale must be made through an offshore transaction
III. No direct selling effort may occur in the U.S.
IV. The issuer must be a publicly traded company headquartered outside the U.S.
, A. I and III
B. I and IV
C. II and III
D. II and IV - CORRECT ANSWER✔✔C. II and III
Regulation S provides companies with certain guidelines through which securities may be sold
outside the U.S., without SEC registration. There are two general conditions that must be met in
order for this safe harbor to apply.
Any offer, sale, or resale is made in an offshore transaction.
No direct selling effort may be made in the U.S. in connection with the transaction.
SEC Rule 144A applies to:
A. Institutional investors
B. Qualified institutional buyers (QIBs)
C. Insiders
D. Accredited investors - CORRECT ANSWER✔✔B. Qualified institutional buyers (QIBs)
Rule 144A allows restricted securities to be sold without being subject to the limitations that are
imposed by Rule 144. The ability to avoid these restrictions is based on the fact that sales are
only made to qualified institutional buyers (QIB). There's a three-part test to determine whether
an entity is a QIB: (1) the investor must be an institution, (2) the buyer must be purchasing for
its own account or for the account of another QIB, and (3) the buyer must own and invest at
least $100 million of securities of issuers that are not affiliated with the buyer.
The type of securities distribution that would be completely cancelled if not fully subscribed to
is a(n):
A. Stand-by
B. All-or-none
C. Best-efforts
D. Firm-commitment - CORRECT ANSWER✔✔B. All-or-none
2025 With 100% Correct Answers
A customer owns shares of restricted stock and now intends to sell them. If the proper forms
are filed with the SEC, the customer may sell these shares:
A. At any time
B. Over a 35-day period
C. Over a 90-day period
D. Over a 180-day period - CORRECT ANSWER✔✔C. Over a 90-day period
Under Rule 144, an investor who intends to sell either restricted or control stock must notify the
SEC by filing Form 144 at the time the sell order is placed. Once the filing is made, the customer
may sell these shares within 90 days.
A broker-dealer that is an MSRB member firm sells bonds to one of its customers. If the broker-
dealer is a member of the syndicate, the firm is entitled to the:
A. Takedown less the concession
B. Additional takedown plus the management fee
C. Total takedown less the management fee
D. TC. Total takedown less the management fee
D. Total takedown - CORRECT ANSWER✔✔D. Total takedown
A member of the syndicate is entitled to the additional takedown plus the concession, which is
also known as the total takedown. Only the syndicate manager is entitled to the management
fee. A broker-dealer that is not a member of the syndicate selling part of a new issue of
municipal bonds is entitled to the concession.
Mr. Brown is a 15% owner of SamCo, a company whose stock is listed on the New York Stock
Exchange. His wife owns 4% of SamCo. If Mrs. Brown wishes to sell some of her SamCo shares,
she:
,A. Must do so according to Rule 144
B. May only do so with the permission of her husband
C. May do so provided that her husband also sells shares
D. May sell the shares without restriction - CORRECT ANSWER✔✔A. Must do so according to
Rule 144
Rule 144 specifies procedures for the sale of restricted stock and control stock. Restricted stock
is stock that is not registered and is acquired through a private placement. Control stock is stock
acquired by affiliated persons. This includes officers, directors, owners of more than 10% of the
stock of a corporation, and their immediate families. Since Mr. Brown owns 15% of SamCo, Mrs.
Brown is selling her shares as an affiliated person.
A primary offering of securities is being made for a company listed on the NYSE. Prospectuses
must be delivered:
A. Only on purchases made at the public offering price
B. For 25 days after the deal has closed
C. For 40 days after the deal has closed
D. For 90 days after the deal has closed - CORRECT ANSWER✔✔A. Only on purchases made at
the public offering price
A primary offering of securities for a company that is already exchange-listed requires that
prospectuses be delivered only on purchases, at the public offering price (POP). There is no
aftermarket delivery requirement.
Which TWO of the following conditions apply and would permit the sale of securities outside
the U.S., without registration with the SEC?
I. Any offer or sale is permitted to be made only to qualified institutional buyers
II. Any offer or sale must be made through an offshore transaction
III. No direct selling effort may occur in the U.S.
IV. The issuer must be a publicly traded company headquartered outside the U.S.
, A. I and III
B. I and IV
C. II and III
D. II and IV - CORRECT ANSWER✔✔C. II and III
Regulation S provides companies with certain guidelines through which securities may be sold
outside the U.S., without SEC registration. There are two general conditions that must be met in
order for this safe harbor to apply.
Any offer, sale, or resale is made in an offshore transaction.
No direct selling effort may be made in the U.S. in connection with the transaction.
SEC Rule 144A applies to:
A. Institutional investors
B. Qualified institutional buyers (QIBs)
C. Insiders
D. Accredited investors - CORRECT ANSWER✔✔B. Qualified institutional buyers (QIBs)
Rule 144A allows restricted securities to be sold without being subject to the limitations that are
imposed by Rule 144. The ability to avoid these restrictions is based on the fact that sales are
only made to qualified institutional buyers (QIB). There's a three-part test to determine whether
an entity is a QIB: (1) the investor must be an institution, (2) the buyer must be purchasing for
its own account or for the account of another QIB, and (3) the buyer must own and invest at
least $100 million of securities of issuers that are not affiliated with the buyer.
The type of securities distribution that would be completely cancelled if not fully subscribed to
is a(n):
A. Stand-by
B. All-or-none
C. Best-efforts
D. Firm-commitment - CORRECT ANSWER✔✔B. All-or-none
